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The not-so-healthy State of the Union

Like it or not what happens in America has a knock-on effect in the rest of the world.

It therefore more than dispiriting to read two incisive pieces in The NY Times giving a fair and clear insight into the State of the Union - delivered by Obama just the other day - of the US.

First, Frank Rich in "The State of the Union Is Comatose":

"The president’s big original goals — health care, economic recovery, financial reform — remained nominally intact, as did his sense of humor. In a rhetorical touch William Safire would have relished, Obama had the wit to rush the ritualistic “our union is strong” so it would not prompt the usual jingoistic ovation.

Good thing, too, since our union is not strong. It is paralyzed. Many Americans were more eagerly anticipating Steve Jobs’s address in San Francisco on Wednesday morning than the president’s that night because they have far more confidence in Apple than Washington to produce concrete change. One year into Obama’s term we still don’t know whether he has what it takes to get American governance functioning again. But we do know that no speech can do the job. The president must act. Only body blows to the legislative branch can move the country forward."

Second up, Paul Volcker in "How to Reform Our Financial System":

"I am well aware that there are interested parties that long to return to “business as usual,” even while retaining the comfort of remaining within the confines of the official safety net. They will argue that they themselves and intelligent regulators and supervisors, armed with recent experience, can maintain the needed surveillance, foresee the dangers and manage the risks.

In contrast, I tell you that is no substitute for structural change, the point the president himself has set out so strongly.

I’ve been there — as regulator, as central banker, as commercial bank official and director — for almost 60 years. I have observed how memories dim. Individuals change. Institutional and political pressures to “lay off” tough regulation will remain — most notably in the fair weather that inevitably precedes the storm.

The implication is clear. We need to face up to needed structural changes, and place them into law. To do less will simply mean ultimate failure — failure to accept responsibility for learning from the lessons of the past and anticipating the needs of the future."

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